The long-term neurotoxic effects of taxol, a compound known to promote microtubule protein polymerization, injected subepineurially into rat sciatic nerve were studied up to 10 weeks post-injection. At the site of injection, taxol caused local axonal reactions and degeneration which were causally related to the slow progressive accumulation of microtubules and other axoplasmic constituents. This culminated in the appearance of giant axonal spheroids and profiles similar to the retraction bulbs of Wallerian degeneration. From these axonal bulbs, many of which arose at nodes of Ranvier, groups of regenerating sprouts emanated. During the acute phase of taxol neurotoxicity, some swollen axons were divested of their myelin sheaths and remained demyelinated for many weeks. After 4 weeks, remyelination was apparent along some fibres. In addition to the accumulation of profiles usually associated with retraction bulbs, there was a vast increase in microtubules, some of which were aligned in concentric rings and formed channels for mitochondria. Microtubule anomalies were also visualized in distal portions of affected fibres and in regenerating sprouts. In contrast, Schwann cells displayed microtubule abnormalities only at the site of the lesion where excessive microtubule polymerization caused the displacement of ribosomes from rough endoplasmic reticulum. Distally, Schwann cells were essentially normal. Axonal depletion and regenerating sprouts were noted further downstream in the tibial nerve, and the gastrocnemius muscle showed changes similar to denervation atrophy. These results extend previous observations by demonstrating chronic, reparatory and reversible phenomena, the implications of which are discussed vis à vis axoplasmic transport and nerve regeneration.